Inside today’s Daily Journal…

Editor’s note: For the second time this week, Porter is turning the Daily Journal over to Emmet Savage, the chief investor and co-founder of the research firm MyWallSt. Emmet has been involved in the stock market for more than two decades, with an independently proven annual return in excess of 24% for the last decade – more than triple what the S&P 500 returned.

Recently, Porter sat down with Emmet to uncover how he explains his success. Watch their interview here for more… It’s quite the conversation.

Here’s Emmet…

The most revolutionary act an investor can perform is often nothing at all.

While the 24-hour news cycle and the flashing red of a market ticker scream for action, the history of the U.S. stock market suggests that the most profound wealth is built not through activity, but through extraordinary patience. As we look across nearly a century of data, the case for a long-term “buy and hold” strategy becomes undeniable. Here is why the “boring” path of staying invested is consistently the most lucrative.

Let’s take a look at some of the reasons why…

Many investors mistake volatility for a permanent loss of capital. In reality, market pullbacks are the “cost of admission” for long-term gains. Since 1928, the S&P 500 has proven that while the climb is jagged, the trajectory is relentlessly upward, surviving everything from the Great Depression to global pandemics.

As the data shows, drawdowns are a feature of the system, not a bug. Over 90% of years experience a dip of at least 5%, and a “correction” (10% or worse) occurs in nearly two out of every three years.

It is tempting to sell when the world feels like it’s falling apart. From the Cuban Missile Crisis to the war in Iran, geopolitical shocks often trigger immediate market fear. However, history shows that the market is incredibly resilient. On average, the S&P 500’s one-year forward return after major geopolitical crises is a robust 14.2%.

The lesson? The “noise” of the headlines is rarely a reason to abandon a well-constructed investment plan. As Sir John Templeton famously noted, the time of maximum pessimism is often the best time to buy, and the worst time to sell.

The most compelling argument for long-term investing is the mathematical relationship between time and the probability of loss. If you hold the S&P 500 for a single day, your chance of losing money is nearly a coin flip (46%). However, as your time horizon expands, that risk begins to evaporate.

According to data from Bank of America Global Research, the probability of a negative return drops to just 6% over a 10-year period. When you extend that to 20 years, the historical probability of losing money in the S&P 500 has been 0%.

The “reward” for sitting through the 20% and 30% drawdowns is the significant forward returns that typically follow. Investors who have the stomach to hold, or better yet, add, during a 30% market drop have seen average five-year forward returns of 88%, with a 98% win rate.

The enduring power of compounding in U.S. stocks relies on one thing: duration. The market is designed to transfer wealth from the impatient to the patient. By avoiding the pitfall of “market timing” and ignoring the short-term fluctuations caused by geopolitical noise, you allow your capital to do the heavy lifting.

As you look at your portfolio today, remember that today is just one more in a multi-decade journey, whatever the headlines may tell you. The fluctuations you feel now will likely be invisible blips on a log-scale chart twenty years from now. Stay invested, stay patient, and let the power of the greatest wealth creation machine we’ve been lucky enough to participate in work for you.

Emmet Savage
MyWallSt.

Porter traveled to Ireland recently to meet with Emmet – and to learn his system. In their conversation, which they recorded on video, Emmet revealed that he’s found what he believes is his next 100-bagger. A U.S.-listed stock that he says could be the next Tesla, Nvidia, or Netflix… He adds: “and I’m personally going in very heavily with my own money.”

In Porter’s interview with Emmet, you’ll discover more about this under-the-radar company that’s applying AI to an archaic industry that’s refused to adapt to the times.

Go here now to see Porter and Emmet’s conversation before it’s too late.

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